Pharmacy Benefit Web Exclusive: Cost effects compliance

October 1, 2004

Through its research correlating copayments with utilization, Express Scripts, a pharmacy benefits manager (PBM) in St. Louis, found that a three-tier structure can control prescription drug costs without causing any unintended consequences, such as visits to the emergency room or hospitalizations.

Through its research correlating copayments with utilization, Express Scripts, a pharmacy benefits manager (PBM) in St. Louis, found that a three-tier structure can control prescription drug costs without causing any unintended consequences, such as visits to the emergency room or hospitalizations.
Emily Cox, director of research, says that Express Scripts promotes the use of cost-effective therapies such as generics through physician and member education, step therapy and doctor/patient communication. A $0 copayment program serves as an incentive for employees to speak with their physicians about changing a prescription from a brand to a therapeutically equivalent generic. If the physician agrees, the plan sponsor will pick up the copayment for a certain period of time.
“We work with clients to provide guidance on how to align copayments based on different drugs—generics, preferred brands and non-formulary brands. Our research has found that increased copayments have more effect on utilization for lower income employees; thus, we recommend that employers consider their population before setting contributions,” says Cox, supporting Dr. Deverka’s suggestion to tailor copayments to income categories.
Remove financial barriers
Pitney Bowes, a large provider of office technologies and services based in Stamford, Conn., has been at the forefront of creating innovative strategies to encourage the appropriate use of drugs and curb pharmaceutical costs. To promote the care of chronic disease, the company decided to push all medications for asthma, diabetes and hypertension down to the first tier. This design removes financial barriers, which may prevent patients from continuing their treatment regimens and lead to more expensive medical services. Through predictive modeling, the company found that those with chronic conditions who were not compliant could be at risk for moving from low-cost to high-cost healthcare consumers.
The coinsurance for asthma and diabetes drugs was lowered to 10% compared with 30% to 50% for other drugs. Less than two years later, emergency room visits for those with diabetes and asthma dropped 35% and 20%, respectively; hospital admissions and office visits decreased; and pharmacy costs for the two classes decreased about 10% annually. Overall health costs for diabetes and asthma patients decreased 12% and 15%, respectively.
“Lowering costs alone does not lead to compliance,” says Jack Mahoney, MD, chief medical officer for Pitney-Bowes. “You still need to educate physicians and employees and ensure that patients are following their drug regimen.”
Connie Perry, vice president at Chicago-based Aon Consulting, recommends that employers establish employee contributions for drugs—coinsurance rather than copayments to make employees aware of the true cost of pharmaceuticals—on par with their share for medical services. If copayments are used, she suggests that contributions for lifestyle drugs, for example, be high and those for chronic disease be waived or put on the first tier to encourage compliance.
“PBMs and insurers need to be more proactive,” Perry says. “Those who track compliance should look at the effect of raising copayments and if outcomes are not good, make some changes, such as providing more generics and lower cost brands to compensate for increased member/employee contributions.”
Mari Edlin is a Mill Valley, Calif.-based writer. She is a frequent contributor to Managed Healthcare Executive.